Thoughts on Day/Swing Trading

[Smart_trade]

Thanks Anurag,

Currently, I am doing scalping (in small numbers) on nifty options. I have realised during the initial months that while scalping you have two choices.

1. Read the chart analysis or 2. Trade.

Currently I have settled for the later.. ..

Just wanted to know if there are any scalpers who could do both, therefore asked.

but just a food for thought, wouldnt then it would be more intutive rather than fact based (scalping i mean).

PS: I do not have any issues in any one intutive or factbased

Regards
Arsh

I do scapling in Nifty Options and I would like to share a few points as under :

1) I need approx 3 points in Nifty options to take cate of exchange charges,low brokerage and STT and also a few wrong trades which always happen irrespective of what we do. So if I am scalping At The Money options ,it means the nifty should give me a move of 6-7 points in direction of my trade that too very quickly.

2) I select my place for scalping .....such as when a hourly bar's bottom gets broken, or a important pivot gets taken out,break of a trend line,failure of breakouts/breakdowns....these are places where the counter gets into high activity mode,the moves are strong and fast. I can achive my targert move in less than a minuts in the trade. Sometimes I got even 6-8 points in such scalps agaist 3 to 3.5 points which I am looking for.....Though this is not scalping strictly....it is actually trading breakouts for small price move.....but whatever it is called ,these quick scalps suit my mental set up.

3) Sometimes bid/ask spread gets wide....in this case try to buy at lower side of the spread and sell at higher side.....this is to be tried in stable markets...not in trend moves because mkts are likely to jump in trend moves....

I am not a regular scalper...but thought of sharing few points here...

Smart_trade

 

[pranay1986]

Re: nac Calling JOBBERS/SCALPERS

I do scapling in Nifty Options and I would like to share a few points as under :

1) I need approx 3 points in Nifty options to take cate of exchange charges,low brokerage and STT and also a few wrong trades which always happen irrespective of what we do. So if I am scalping At The Money options ,it means the nifty should give me a move of 6-7 points in direction of my trade that too very quickly.

2) I select my place for scalping .....such as when a hourly bar's bottom gets broken, or a important pivot gets taken out,break of a trend line,failure of breakouts/breakdowns....these are places where the counter gets into high activity mode,the moves are strong and fast. I can achive my targert move in less than a minuts in the trade. Sometimes I got even 6-8 points in such scalps agaist 3 to 3.5 points which I am looking for.....Though this is not scalping strictly....it is actually trading breakouts for small price move.....but whatever it is called ,these quick scalps suit my mental set up.

3) Sometimes bid/ask spread gets wide....in this case try to buy at lower side of the spread and sell at higher side.....this is to be tried in stable markets...not in trend moves because mkts are likely to jump in trend moves....

I am not a regular scalper...but thought of sharing few points here...

Smart_trade

Hi Smart_trade,

Thanks a ton for sharing your experience.

Just had a thought and hence would want to know a opinion as i also would like to carry out scalping/jobbing above in Nifty options.

Considering that ATM and ITM tend to move nicely with the trend and can easily give 5 - 6 points in seconds, would you define them as your targets i.e. have a pre fixed target in your mind that when i acheive 6 points i will exit irrespective of the move by keeping a stoploss of 3 rs..(1:2) risk reward ratio. I am also using a broker which results in high brokerage for options and hence tends to create doubts in my mind about the exit.. and as the lot increase so does the brokerage so is there any tendency to tingle with the stoploss in case of trend not being in favour? (Applied for zerodha so hopefully brokerage will be no problem as such for future)

Finally would you prefer cash or options for scalping, just a thought as the moves in ATM or ITM options can be caught easily as compared to cash positions.

I am just a novice trader just trying to understand the nitty grittys of trading and trying to create a simple system

Regards,
Pranay

 

[Smart_trade]

Re: nac Calling JOBBERS/SCALPERS

Hi Smart_trade,

Thanks a ton for sharing your experience.

Just had a thought and hence would want to know a opinion as i also would like to carry out scalping/jobbing above in Nifty options.

Considering that ATM and ITM tend to move nicely with the trend and can easily give 5 - 6 points in seconds, would you define them as your targets i.e. have a pre fixed target in your mind that when i acheive 6 points i will exit irrespective of the move by keeping a stoploss of 3 rs..(1:2) risk reward ratio. I am also using a broker which results in high brokerage for options and hence tends to create doubts in my mind about the exit.. and as the lot increase so does the brokerage so is there any tendency to tingle with the stoploss in case of trend not being in favour? (Applied for zerodha so hopefully brokerage will be no problem as such for future)

Finally would you prefer cash or options for scalping, just a thought as the moves in ATM or ITM options can be caught easily as compared to cash positions.

I am just a novice trader just trying to understand the nitty grittys of trading and trying to create a simple system

Regards,
Pranay

Hello Pranay,

Scalping is a trding style which calls for quick entry and exits. Achieving 6 points and above in ATM/ITM options means a move of 12 points in Nifty...which is bit difficult ....in scalping the trade has to workout immediately and you make 3 points or if it doesnot workout, you try to get out as a scratch trade or at max 1.5 to 2 points loss....no scope for thinking or tinckering with the stops....

ITM options are better as they have higher delta....options are better for scalping because of incidence of low STT and exchange charges which is very important in scalping.

From your questions it appears that you are more suited for intraday swing/flow trades than scalping....in intraday swing trades we observe risk/reward,running the profitable position and cutting the loosing positions fast,adding in profitable positions etc which give a much better R/R than scalp trades.....but scalping has its own beauty and charm.......

Try intraday swing trades in directions of larger timeframe or in the direction of the price flow.....I will try to post a few intraday charts showing the trades on both these methods to make your understanding more clear....will try to post them on the coming weekends..... as next 2-3 days will be very hectic being F & O expiry/new contract initial days...

Best wishes for your success....

Smart_trade

 

[Easytrader]

Re: nac Calling JOBBERS/SCALPERS

Hello Pranay,

Scalping is a trding style which calls for quick entry and exits. Achieving 6 points and above in ATM/ITM options means a move of 12 points in Nifty...which is bit difficult ....in scalping the trade has to workout immediately and you make 3 points or if it doesnot workout, you try to get out as a scratch trade or at max 1.5 to 2 points loss....no scope for thinking or tinckering with the stops....

ITM options are better as they have higher delta....options are better for scalping because of incidence of low STT and exchange charges which is very important in scalping.

From your questions it appears that you are more suited for intraday swing/flow trades than scalping....in intraday swing trades we observe risk/reward,running the profitable position and cutting the loosing positions fast,adding in profitable positions etc which give a much better R/R than scalp trades.....but scalping has its own beauty and charm.......

Try intraday swing trades in directions of larger timeframe or in the direction of the price flow.....I will try to post a few intraday charts showing the trades on both these methods to make your understanding more clear....will try to post them on the coming weekends..... as next 2-3 days will be very hectic being F & O expiry/new contract initial days...

Best wishes for your success....

Smart_trade

Looking forward to your charts it will be good to see because charts help explain the situation very better

:thumb:

 

[Smart_trade]

Re: nac Calling JOBBERS/SCALPERS

Intraday trading can be done in following ways :

1) Take all trades in the direction of the longer timeframe. So if we are trading on 5 min chart, see what is the trend on 30 min chart...if it is down, take all short trades on 5 min chart.....but your trade entry,stops and profit taking all has to be on 5 min chart.. This is relatively easy as we are trading in one direction generally unless the trend on larger timeframe reverses during the day..

2) Trade the intraday swings without any bias....trade as the price flow moves...trade from short and long both sides....this mode is bit difficult as we need to be fast in reversing our positions and we need to understand the market action well....and very rigid on stops....

Let us take the tougher part .....intraday swings. I am posting Telco 5 min chart for last 2 days with trades , adds,profit taking points marked on the chart....

Smart_trade

 

[Smart_trade]

Re: nac Calling JOBBERS/SCALPERS

Posting a chart showing how to daytrade 5 min timeframe chart in the direction of 30 min timeframe trend. The scrip is Bank Nifty Future .The chart on top is 30 min and the visual trend on 30 min has changed to DOWN at the red line marked. In 5 min chart, we take all short trades, add and take our profits......no long trade as long as 30 min visual trend does not become UP.....Both methods are baed on pure price action.....

Out of the two styles shown above which one is more profitable ?? Actually both are very profitable, the choice really depends on the mental set up of the trader....choose any style which you are comfortable with and you can handle with ease .....there should be no strain,tension while trading these charts...the moment there is strain , be sure that something is amiss.....

Smart_trade

 

[Smart_trade]

Re: nac Calling JOBBERS/SCALPERS

Dear ST da,
I think you are posting a nice trading setups in wrong thread... ...

Hello VJAY,

I had promised to pranay that I will post a few intraday charts setups on this weekend......

ST

 

[Smart_trade]

Re: nac Calling JOBBERS/SCALPERS

....................................

Uploaded again as separate charts.....are they visible now ?....they are visible on my computer...

ST

 

[veluri1967]

Re: nac Calling JOBBERS/SCALPERS

Uploaded again as separate charts.....are they visible now ?....they are visible on my computer...

ST

Thanks ST. Now Charts are clear and loud. :thumb:

When you get free time, please do write something about Position sizing at Initial Entry and subsequent ADDs.

1.Say for Rs.1 lac a/c, what should be initial size. What are Add sizes. How many Add can be undertaken etc. (ie in Cash Segment). Is it appropriate to unleash the power of margin for Adds.

2. What should be ideal a/c size for trading Futures/options (take into consideration effective Adds and M2M requirements).

When I read your posts, I can see your crystal clear mind without any clusters of doubt.

 

[CASPER]

Re: nac Calling JOBBERS/SCALPERS

Posting a chart showing how to daytrade 5 min timeframe chart in the direction of 30 min timeframe trend. The scrip is Bank Nifty Future . .....................
........choose any style which you are comfortable with and you can handle with ease .....there should be no strain,tension while trading these charts...the moment there is strain , be sure that something is amiss.....
Smart_trade

Hi ST ,

Have read a lot of posts by you ..,

Your explanation of De Marks method of Overbought ( 5 Bars) was very good ..., Do remember your post on the explanation of 60 minute flow & how it works ( Also remember your comparison to Spider and its Web.... )...,Have hard Bound copies of the same.

Now to My question on your 5 Minute Chart of BNF.., Why there are no long positions at the blue line(Horizontal) i have marked on Your Chart ...,

Moreover we see an aggressive pivot(Red bar) after the WRB ..., Is this NOT a confirmation that the trend is continuing...? OR was one suppsoed to expect a sideways movement after the WRB hence Long positions are not taken..

OR am i confused with my understanding of Pivots ..

Your reply for the above will be much appreciated.

Best Wishes...,
Nithin.

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